What is the penalty for withdrawing from a 401(k) before 59½?

A 10% additional tax on the taxable amount, IRC §72(t), reported on Form 5329, on top of the income tax. It applies to money taken before you reach 59½; in the year you turn 59 the calculator asks your birth month to place that date. Some states add their own tax on an early withdrawal as well.

Is the 20% withheld from my 401(k) withdrawal the tax I owe?

No. It is a prepayment the plan must take from any amount that could have been rolled over, and you cannot choose less than 20% (Form W-4R). The tax is figured on your return: in the California example $4,000 is withheld but the withdrawal adds $6,400 of federal tax, so about $2,400 more is due at filing. A direct rollover to an IRA or another plan has nothing withheld.

How can I avoid the 10% penalty on a 401(k) withdrawal?

The exceptions are set by law (IRS list of exceptions): leaving the employer in or after the year you turn 55 (50 for public safety employees) and taking the money from that employer’s plan; a series of substantially equal periodic payments (see the 72(t) SEPP calculator); total and permanent disability; death; governmental 457(b) money; and several smaller ones, such as medical expenses above 7.5% of AGI and a birth or adoption distribution.

Does the rule of 55 work if I roll my 401(k) into an IRA?

No. The separation-from-service exception covers only the plan of the employer you left. In the North Carolina example, taking $40,000 straight from the 401(k) at 56 has no additional tax; rolling it to an IRA first adds $4,000.

How does my RMD affect a 401(k) withdrawal?

From your RMD start age the first dollars you take count toward the RMD. That part cannot be rolled over, so it has 10% withheld by default instead of 20%. With a $400,000 balance at 75 the 2026 RMD is $16,260; whatever is not taken by December 31 owes a §4974 excise ($1,565 on the shortfall in the Ohio example, $626 if corrected in time).

Do I have to take an RMD from my 401(k) if I am still working?

Often not from the plan of the employer you still work for: its RMDs can wait until you retire, unless you own more than 5% of the business (26 CFR 1.401(a)(9)-2). IRAs and the plans of former employers have no such delay.

401(k) Withdrawal Calculator 2026

Enter how much you want to take out of a 401(k), 403(b), governmental 457(b) or IRA in 2026. The tax engine works out the federal and state income tax the withdrawal adds, the 10% additional tax before 59½ and whether an exception removes it, what the plan withholds at payout compared with the tax you will actually owe, and how the withdrawal meets your required minimum distribution.

Planning a series of penalty-free payments before 59½? The 72(t) SEPP calculator sizes them. Past your RMD age? The RMD calculator shows the required amount and the tax on it.

How much tax will I pay on a 401(k) withdrawal in 2026?

A withdrawal from a traditional 401(k) is ordinary income: it is taxed at your top federal bracket plus your state’s rate, and before 59½ it usually costs a further 10% (IRC §72(t)). The 20% your plan withholds is a prepayment, not the tax. Example: a single 45-year-old in California earning $80,000 who takes $20,000 out of a 401(k) owes $6,400 more federal tax, of which $2,000 is the 10% additional tax, plus $2,346 of California tax: $8,746, 43.7% of the withdrawal, leaving $11,254. The plan withholds $4,000, so about $2,400 more federal tax is due at filing.

The worked example, computed by the tax engine: single, age 45, California, $80,000 of wages, $20,000 withdrawn from a 401(k) in 2026.
Key number	2026
Federal income tax the withdrawal adds (Rev. Proc. 2025-32)	$4,400
10% additional tax (under 59½) (§72(t)(1))	$2,000
California tax it adds (California rules)	$2,346
Federal + state tax on the withdrawal	$8,746
Tax as a share of the withdrawal	43.7%
What is left of the $20,000	$11,254
Withheld at payout (20%) (Form W-4R)	$4,000
Federal tax still due at filing	$2,400

An estimate from QuantCalc’s open tax engine (federal 2.0.0, state 1.12.0) for the 2026 tax year. Not tax advice: your return depends on facts this page does not ask about, so check a move with your tax preparer or custodian before acting. How the engine computes each line, with its official source: federal, state.

Run your own numbers in the calculator below: the withdrawal, your age, your state and your other income.

Calculate the tax on your withdrawal

Amount to withdraw ($) Taken from Filing status Your age on Dec 31, 2026 State

Your other 2026 income

Wages ($) Pension or annuity ($) Social Security ($)Gross benefits

Before 59½: an exception to the 10%

Leaving the employer in or after the year you turn 55 (50 for public safety employees) removes the 10% on money taken from that employer’s plan.

Age in the year you left this employer

I was a public safety employee of a state or local government plan

Example — enter your numbers

Can I avoid the 10% penalty with the rule of 55?

The 10% additional tax does not apply to money taken from the 401(k), 403(b) or governmental plan of the employer you left in or after the year you turned 55 (50 for public safety employees), §72(t)(2)(A)(v). It is the plan of that employer only: roll the money into an IRA first and the exception is gone, because IRAs do not have it (IRS list of exceptions). Example: a single 56-year-old in North Carolina who left the job at 55 and takes $40,000 straight from that 401(k) owes $2,623 of federal tax and $1,087 of North Carolina tax, with no additional tax. Rolled to an IRA first, the same $40,000 adds the 10% additional tax, $4,000, so rolling over first costs $4,000 more.

The other ways to take money before 59½ without the 10%, a series of substantially equal periodic payments among them, are compared in penalty-free ways to access retirement money before 59½.

How does a 401(k) withdrawal work with my RMD?

From the year you reach your RMD start age, the first dollars you take each year count toward the required minimum distribution, which is the account balance on December 31 of the previous year divided by the IRS life-expectancy divisor (Uniform Lifetime Table). The RMD cannot be rolled over (IRC §402(c)(4)), so the 20% rule does not apply to it: it is a nonperiodic payment with 10% withheld unless you choose another rate (Form W-4R). Example: a single 75-year-old in Ohio with $30,000 of Social Security and $400,000 in a 401(k) on December 31, 2025 has a 2026 RMD of $16,260. Taking $30,000 adds $2,119 of federal and $105 of Ohio tax. The plan withholds $2,748 (20% of the $13,740 above the RMD) plus $1,626 (10% of the RMD), $4,374 in all: $2,255 more than the federal tax the withdrawal adds, which comes back at filing or can be lowered on the RMD part with Form W-4R. Taking only $10,000 by December 31 would leave part of the RMD untaken, and the excise on the shortfall is $1,565, or $626 if it is corrected in time (IRC §4974).

Which states add their own early-withdrawal tax?

A few states add their own tax on an early withdrawal that has no exception, on top of their income tax: Arkansas 1%, California 2.5%, Nebraska 2.96%, Vermont 2.4%, Wisconsin 3.3%. Colorado, Michigan, Pennsylvania and South Carolina keep their retirement-income break for early withdrawals only under some of the federal exceptions. The calculator includes the state addition when no exception applies; when you claim one, it computes the state line wherever the exception does not change the state’s rule, and otherwise points you to that state’s rules.

Common questions

How much tax will I pay on a 401(k) withdrawal?: It is ordinary income, taxed at your top federal bracket plus your state’s rate, plus a 10% additional tax before 59½ unless an exception applies. A single 45-year-old in California earning $80,000 pays $6,400 of federal tax (including $2,000 of additional tax) and $2,346 of state tax on a $20,000 withdrawal: $8,746, 43.7% of it.
What is the penalty for withdrawing from a 401(k) before 59½?: A 10% additional tax on the taxable amount, IRC §72(t), reported on Form 5329, on top of the income tax. It applies to money taken before you reach 59½; in the year you turn 59 the calculator asks your birth month to place that date. Some states add their own tax on an early withdrawal as well.
Is the 20% withheld from my 401(k) withdrawal the tax I owe?: No. It is a prepayment the plan must take from any amount that could have been rolled over, and you cannot choose less than 20% (Form W-4R). The tax is figured on your return: in the California example $4,000 is withheld but the withdrawal adds $6,400 of federal tax, so about $2,400 more is due at filing. A direct rollover to an IRA or another plan has nothing withheld.
How can I avoid the 10% penalty on a 401(k) withdrawal?: The exceptions are set by law (IRS list of exceptions): leaving the employer in or after the year you turn 55 (50 for public safety employees) and taking the money from that employer’s plan; a series of substantially equal periodic payments (see the 72(t) SEPP calculator); total and permanent disability; death; governmental 457(b) money; and several smaller ones, such as medical expenses above 7.5% of AGI and a birth or adoption distribution.
Does the rule of 55 work if I roll my 401(k) into an IRA?: No. The separation-from-service exception covers only the plan of the employer you left. In the North Carolina example, taking $40,000 straight from the 401(k) at 56 has no additional tax; rolling it to an IRA first adds $4,000.
How does my RMD affect a 401(k) withdrawal?: From your RMD start age the first dollars you take count toward the RMD. That part cannot be rolled over, so it has 10% withheld by default instead of 20%. With a $400,000 balance at 75 the 2026 RMD is $16,260; whatever is not taken by December 31 owes a §4974 excise ($1,565 on the shortfall in the Ohio example, $626 if corrected in time).
Do I have to take an RMD from my 401(k) if I am still working?: Often not from the plan of the employer you still work for: its RMDs can wait until you retire, unless you own more than 5% of the business (26 CFR 1.401(a)(9)-2). IRAs and the plans of former employers have no such delay.